Was California’s Wine Revolution Just a Mirage?

In Don DeLillo’s 1985 novel, White Noise, he writes of the spectacle of watching tragedy unspool far away. “Only a catastrophe gets our attention. We want them, we depend on them. As long as they happen somewhere else. This is where California comes in.” 

This is doubly true in wine. Disasters and freak incidents that would shock any other wine-producing region—floods, fires, earthquakes, sometimes all in a single calendar year—seem to occur with depressing frequency in California. It’s a place where we are so used to bad things happening that we fail to notice them getting worse. Case in point: Today, California is home to one of the greatest concentrations of talented young winemakers in the world, and yet many of them will tell you that they are one step away from hanging it all up for good. 

In a series of recent Instagram posts, Patrick Cappiello, ex-NYC sommelier and current owner-winemaker of Monte Rio Cellars, has brought this fact to the fore, laying bare a crisis that he believes will end in many beloved wineries closing. In short, he says, “we are hurting.” Megan Bell, owner-winemaker of Margins Wine, a Santa Cruz winery focusing on low-intervention wines, agrees. “You would be shocked at the people who are struggling,” she told me.

It’s impossible to discuss the precarious nature of California wine without discussing how, generally, California winemakers, especially young ones, do not own the land where their grapes come from. They instead purchase fruit from growers—sometimes a handful, sometimes more, scattered about the state. Elsewhere in the world, but especially in Europe, the current mark of quality for wine is that it’s produced soup to nuts entirely in-house: The winemaker is the winegrower—a joint figure known as a vigneron—who farms land that has, in many instances, been tended by their family for generations. Obviously, things become more complicated when you look at specific cases, but as a mental map, this is a good starting point.

According to Jon Bonné, whose book The New California Wine chronicled the state’s evolving wine scene of the 2010s, this long-established California model derives from systems in Bordeaux and Germany. Despite this pedigree, however, it’s often viewed as holding less cachet than the vigneron model—an argument I am absolutely agnostic toward. Certainly, it’s possible that a winemaker can learn their terroir better by being intimately connected with the parcels and being in charge of the farming themselves—hence, the oft-repeated truism that “wine is made in the vineyard.” On the other hand, it’s also possible that by splitting the job of the winemaker and the winegrower, everyone gets to double down on their strengths, as cellar wizardry and a green thumb don’t always go hand in hand. As it stands today, there are certainly enough Cali bangers on the market to suggest that it doesn’t always matter who is farming, as long as they’re farming well.

What’s missing from this discussion is the fact that the vigneron model is an economic model—one that prioritizes self-sufficient estates and concentrates their productivity into fine wine. This model is, by and large, one that small California winemakers cannot embrace. According to David Carciere of Cruland.com, a real estate firm specializing in California vineyards, the current average price of vineyard land in California is around $100,000 an acre, which is significantly more than the average cost of appellation land in France, at roughly $66,000 per acre, according to French land agency Safer’s 2022 Le Prix des Terres report; Italy and Spain can be had for significantly less. Both averages include eye-wateringly expensive vineyards—Napa and Champagne command prices that are truly wild—but if we get granular it’s a bit easier to understand. For instance, Carciere estimates costs for an acre of land in Mendocino at $30,000 to $50,000, the Central Coast at $40,000 to $75,000 and the Central and Sacramento valleys at $20,000 to $40,000. By comparison, according to Safer’s Le Prix des Terres, an acre of land in Bordeaux will run you $49,500, $22,500 in the Rhône, $17,000 in the Loire, and $5,600 in Languedoc-Roussillon at the current euro to U.S. dollar exchange rate.

Owning land might not seem like a big leg up—after all, farming is expensive and the upkeep might prove to be way more challenging than purchasing fruit. But vineyards, even nonoptimal ones, are economic lifelines for vignerons in Europe. It allows them to sell excess fruit to co-ops or négociants to make ends meet; or, if that doesn’t pan out, there’s always the option of selling the land itself, taking out a loan against it or building an agriturismo facility—obviously not the best safety net, but a net nonetheless. Small California winemakers, without land, have very few backup revenue streams. “No bank is going to give [small winemakers] a loan,” says Bell of Margins. “They know we’re a bad investment.” Instead, many winemakers, Bell included, have turned to crowdfunding to make ends meet. “I don’t think it’s a safety net. People are fucked. It’s a last resort.”

It’s not just that winemakers can’t afford vineyards, it’s the downstream effects that make the picture so grim. The cost of living in California wine regions is exceptionally high. According to Brent Mayeaux of Stagiaire Wine, a Richmond, California–based natural winery, $1,300 for a room in a shared house “feels like a steal.” This is in addition to winery rent, which various sources estimated is between $3,000 and $6,500 per month (or more) in the Bay Area for a solo space, up to $50,000 a year for a shared space in Sonoma County, all for production that, across the six wineries I spoke with, is less than 3,000 cases annually. For winemakers working with smaller amounts of fruit or with fewer resources, the economics dictate using custom-crush facilities. Matthew Niess, the owner and winemaker at North American Press in Sonoma, which focuses on hybrid varieties, says the costs at the custom-crush facility that handles his fruit have risen by about 20 percent in the last few years to $2,350 per ton, which translates to around 700 to 800 bottles. 

This is to say nothing of the price of glass and corks and labels and bottling and the vast number of doodads and gadgets needed to turn grapes into wine—all of which fluctuate wildly and generally necessitate upfront payment. Neiss says that due to global supply chain issues, his costs for bottles went up 100 percent in 2022 (they have since receded slightly)—a cost he was unable to pass on to his customers for fear that they wouldn’t pay the higher price. “Wineries are the bag-holders,” he says, “arguably the least desirable position in this whole game.” Neiss estimates the total operating costs for 500 cases at $64,000 per year—most of which is due well before a single bottle can be sold. He does not take a salary from North American Press. Will Basanta and Chenoa Ashton-Lewis of buzzy Sonoma-based Ashanta do not take a salary either. They say that making wine used to cover their housing costs, but not any longer. “The only thing that allows us to keep going is that we have other careers as well,” says Basanta.

All of this adds up to winemakers who begin their vintage almost comically in debt. In such an environment, there’s tremendous pressure to sell out as quickly as possible, even if it requires lowering prices beyond a sustainable point. As recently as 2022, winemakers could depend on mailing lists, wine clubs and direct-to-consumer sales to keep them afloat, but that revenue stream has dried up for many, cutting their margins precipitously and forcing them to compete for spots on lists and shelves with overseas producers who have less overhead. Nearly everyone I spoke with said that to be truly comfortable, their wines would need to be priced $20 to $30 higher on the shelf, far more than distributors or consumers are prepared to pay. “We can never reflect what the price should actually be on these wines,” says Ashton-Lewis. “Our price points are really low considering how expensive making wine is here.”

To be clear, it has never been an easy time to be a small winemaker, anywhere. One source who declined to be named asked me, rhetorically, how many independent California winemakers from 2005 are still making it work in California. Perhaps there’s always been a rate of attrition that runs contrary to the prevailing narrative. But I think it’s worth listening to the growing chorus of talented California winemakers—whose wines are on the “right” lists and shelves and media—who say that rising costs and increased competition have seriously disrupted an already fragile calculus. Many expressed a fear that their projects, many of which have consumed years of their lives, could vanish with one bad vintage or one late check from their distributor or one more inexplicable market shift (remember piquette?) or even just one unexpected bill to pay.

When Cappiello put a voice to these economic woes eight weeks ago, he “challenged” people to drink more domestic wine. I’ll absolutely cosign that and say that if you like a producer, consider buying directly from them. But to be clear, a few weeks of sales won’t make the Golden State amenable for young winemakers again. The real requirements are a class of consumers willing to pay a premium for domestic wine, precisely because it is from here and because that’s worth celebrating, even if it’s $25 more per bottle. “Maybe people will be graceful if they know what goes into our costs,” says Terah Bajjalieh, of Terah Wine Co. in the Bay Area. Barring that, the future of our greatest winegrowing state will be, for the first time, out of the hands of the young winemakers who have remade every generation of California wine in their own image.